Method and apparatus for on-line prediction of product concept success

ABSTRACT

A method, network entity and computer program product are provided for conducting a prediction market to test product concepts. In particular, an interface may be provided from which a user may select one or more markets in which the user would like to participate in a prediction market. Information associated with each of a group of product concepts falling within one of the selected markets, including a stock price, may be retrieved and displayed to the user. The user may indicate a number of shares he or she would like to purchase in at least one of the product concepts, and the stock price associated with each of the product concepts may be adjusted based on the number of shares purchased. A report may be generated and transmitted to a merchant associated with the product concepts being tested, wherein the report may include a volume weighted average price associated with each product concept.

CROSS REFERENCE TO RELATED APPLICATION

This application claims benefit of Provisional Patent Application Ser.No. 61/114,700, filed Nov. 14, 2008, which application is hereby fullyincorporated by this reference in its entirety and made a part hereof.

FIELD

Embodiments of the invention relate, generally, to concept testing and,in particular, to using prediction markets to perform concept testing.

BACKGROUND

Currently, conducting a scientifically sound new product or marketingconcept test can be an expensive endeavor. Professionally designedconcept tests can cost upwards of $6-8,000 per concept tested, and asingle focus group can cost around $12,000. Since this is outside thereach of many marketers and small business owners, they instead oftenmust rely upon their own intuition or the opinions of a few friends orcolleagues.

A need, therefore, exists for an accurate and more economical way totest new product or market concepts.

BRIEF SUMMARY

In general, embodiments of the present invention provide an improvementby, among other things, providing an innovative, high-tech system andmethod that presents a new and highly accurate way to predict thesuccess of new products, packages, logos, advertisements and anythingelse traditionally measured with monadic concept tests or traditionalscreening methodologies.

In particular, embodiments of the present invention provide an onlinemarketplace where users are given virtual dollars to buy “shares” in theproduct concepts (e.g., products, packages logos, advertisements, etc.)that a merchant wishes to test. Just like in the real world markets,share prices may fluctuate based on the perceived market value of theunderlying asset. By observing how share prices move over time,embodiments of the present invention enable accurate predictionsregarding the real world success of the concepts being tested.

In accordance with one aspect, a method is provided for conducting aprediction market to test product concepts. In one embodiment, themethod may include: (1) receiving a selection of one or more markets inwhich a user would like to participate in a prediction market; (2)retrieving information associated with a group of product conceptsfalling within one of the selected markets, said information comprisinga stock price associated with respective product concepts of the groupof product concepts; (3) causing the retrieved information to bedisplayed; (4) receiving an indication of a number of shares to bepurchased by the user in at least one of the product concepts; and (5)adjusting, by a processer, the stock price associated with each productconcept in the group of product concepts based at least in part on thenumber of shares purchased, wherein a sum of the stock prices associatedwith each of the product concepts in the group of product concepts isconstant.

According to another aspect, a network entity is provided for conductinga prediction market to test product concepts. In one embodiment, thenetwork entity may include a processor configured to: (1) receive aselection of one or more markets in which a user would like toparticipate in a prediction market; (2) retrieve information associatedwith a group of product concepts falling within one of the selectedmarkets, said information comprising a stock price associated withrespective product concepts of the group of product concepts; (3) causethe retrieved information to be displayed; (4) receive an indication ofa number of shares to be purchased by the user in at least one of theproduct concepts; and (5) adjust the stock price associated with eachproduct concept in the group of product concepts based at least in parton the number of shares purchased, wherein a sum of the stock pricesassociated with each of the product concepts in the group of productconcepts is constant.

In accordance with yet another aspect, a computer program product isprovided for conducting a prediction market to test product concepts.The computer program product contains at least one computer-readablestorage medium having computer-readable program code portions storedtherein. The computer-readable program code portions of one embodimentmay include: (1) a first executable portion for receiving a selection ofone or more markets in which a user would like to participate in aprediction market; (2) a second executable portion for retrievinginformation associated with a group of product concepts falling withinone of the selected markets, said information comprising a stock priceassociated with respective product concepts of the group of productconcepts; (3) a third executable portion for causing the retrievedinformation to be displayed; (4) a fourth executable portion forreceiving an indication of a number of shares to be purchased by theuser in at least one of the product concepts; and (5) a fifth executableportion for adjusting the stock price associated with each productconcept in the group of product concepts based at least in part on thenumber of shares purchased, wherein a sum of the stock prices associatedwith each of the product concepts in the group of product concepts isconstant.

BRIEF DESCRIPTION OF THE SEVERAL VIEWS OF THE DRAWING(S)

Having thus described embodiments of the invention in general terms,reference will now be made to the accompanying drawings, which are notnecessarily drawn to scale, and wherein:

FIG. 1A is a block diagram of one type of system that would benefit fromembodiments of the present invention;

FIG. 1B is a schematic block diagram of an entity capable of operatingas a Prediction Market server in accordance with embodiments of thepresent invention;

FIG. 2 is a flow chart illustrating the process of conducting aprediction market for concept testing in accordance with embodiments ofthe present invention; and

FIGS. 3A-3K are screen shots illustrating an interface for conductingprediction markets in accordance with an embodiment described herein.

DETAILED DESCRIPTION

Embodiments of the present invention now will be described more fullyhereinafter with reference to the accompanying drawings, in which some,but not all embodiments of the inventions are shown. Indeed, embodimentsof the invention may be embodied in many different forms and should notbe construed as limited to the embodiments set forth herein; rather,these embodiments are provided so that this disclosure will satisfyapplicable legal requirements. Like numbers refer to like elementsthroughout.

Overall System and Prediction Market Server:

Referring to FIG. 1A, an illustration of one type of system that maybenefit from embodiments of the present invention is provided. As shownin FIG. 1A, the system can include one or more user electronic devices(e.g., personal computers (PCs), laptops, personal digital assistants(PDAs), etc.) 10, 12 in communication with a Prediction Market system 30over a communication network 20 (e.g., a wired or wireless personal areanetwork (PAN), local area network (LAN), wide area network (WAN), etc.)for the purpose of enabling the users to participate in a predictionmarket for product concept testing. As described in more detail below,the users may further be in communication with the Prediction Marketsystem 30 for the purpose of completing a survey, the results of whichmay be used to determine the outcome of a prediction market.

In one embodiment, the Prediction Market system 30 can include aPrediction Market server 32, or similar network entity, thefunctionality of which is described in more detail below with regard toFIGS. 1B and 2, as well as one or more databases 34, 46. The databasesmay include, for example, a trader database 34 configured to storeinformation associated with each of a plurality of traders including,for example, a trader profile, a monetary balance of the trader, arecord of the shares purchased and/or sold by the trader, as well as thestock price of those shares at the time of purchase or sale, and/or thelike. The databases may further include a concept database 36 configuredto store information associated with each of a plurality of productconcepts corresponding to a plurality of different markets (e.g.,apparel, electronics, etc.). As used herein “product concept,” can referto any product, package, logo, advertisement and/or the like that iscapable of being tested for likely market success via a predictionmarket in the manner described herein.

The system may further include one or more merchant servers 40, 42, orsimilar network entities, also in communication with the PredictionMarket system 30 over the same or different network 20. As described inmore detail below, the merchant servers 40, 42 may be configured toprovide information regarding product concepts to be tested via thePrediction Market system 30, as well as to receive feedback relating tothe prediction markets conducted.

While the foregoing describes separate databases 34 and 36 as beingassociated with and containing information used by the Prediction Marketsystem 30 and corresponding server 32, as one of ordinary skill in theart will recognize in light of this disclosure, the contents of thesedatabases can be stored in a single database or spread over any numberof databases. Alternatively, or in addition, some or all of theinformation described as being stored in the databases may be storedlocally on the Prediction Market server 32.

In addition, while the foregoing refers to a Prediction Market “server”and merchant “servers,” as one of ordinary skill in the art willrecognize in light of this disclosure, embodiments of the presentinvention are not limited to a client-server architecture. In contrast,other similar computing devices and architectures may likewise be usedwithout departing from the spirit and scope of embodiments describedherein.

Referring now to FIG. 1B, a block diagram of an entity capable ofoperating as a Prediction Market server 32 is shown in accordance withone embodiment of the present invention. The entity capable of operatingas a Prediction Market server 32 can include various means forperforming one or more functions in accordance with embodiments of thepresent invention, including those more particularly shown and describedherein. It should be understood, however, that one or more of theentities may include alternative means for performing one or more likefunctions, without departing from the spirit and scope of the presentinvention. As shown, the entity capable of operating as a PredictionMarket server 32 can generally include means, such as a processor 210,for performing or controlling the various functions of the entity.

In particular, the processor 210 may be configured to perform theprocesses discussed in more detail below with regard to FIG. 2. Forexample, according to one embodiment the processor 210 may be configuredto cause to be displayed information, including a stock price,associated with each of a group of product concepts for which aprediction market is being conducted. The processor 210 may further beconfigured to then receive an indication of a number of shares in one ormore of the product concepts a trader would like to purchase, and toupdate the stock price associated with each of the product concepts inthe group based on the shares being purchased. Once the predictionmarket has been closed, the processor 210 may be further configured todetermine a winning product concept, cash out the traders participatingin the prediction market, and generate and transmit a report associatedwith the prediction market to the merchant associated with the group ofproduct concepts.

In one embodiment, the processor is in communication with or includesmemory 220, such as volatile and/or non-volatile memory that storescontent, data or the like. For example, the memory 220 may store contenttransmitted from, and/or received by, the entity. Also for example, thememory 220 may store software applications, instructions or the like forthe processor to perform steps associated with operation of the entityin accordance with embodiments of the present invention. In particular,the memory 220 may store software applications, instructions or the likefor the processor to perform the operations described above and belowwith regard to FIG. 2 for conducting a prediction market to test productconcepts.

For example, according to one embodiment, the memory 120 may store oneor more modules for instructing the processor 210 to perform theoperations including, for example, a price adjustment module, a winningconcept module, a cash out module, and an analysis module. In oneembodiment, the price adjustment module may be configured to cause theprocessor 210 to adjust the price of each of the group of productconcepts being tested based on the number of shares being purchased by atrader in at least one of the product concepts. The winning conceptmodule may be configured to cause the processor 210 to identify which ofthe product concepts in the group of product concepts is the winningconcept, and the cash out module may be configured to cause theprocessor 210 to determine an amount to be paid to or by the tradersparticipating in the prediction market based on the winning concept, thenumber of shares purchased by each trader in the various productconcepts, and the price of those shares at the time of purchase.Finally, the analysis module may be configured to cause the processor210 to analyze the results of the prediction market in order to generateand transmit a report to the merchant associated with the productconcepts being tested.

In addition to the memory 220, the processor 210 can also be connectedto at least one interface or other means for displaying, transmittingand/or receiving data, content or the like. In this regard, theinterface(s) can include at least one communication interface 230 orother means for transmitting and/or receiving data, content or the like,as well as at least one user interface that can include a display 240and/or a user input interface 250. The user input interface, in turn,can comprise any of a number of devices allowing the entity to receivedata from a user, such as a keypad, a touch display, a joystick or otherinput device.

Method of Conducting Prediction Markets for Concept Testing:

Referring now to FIG. 2, the operations are illustrated that may betaken in order to conduct a prediction market for testing productconcepts in accordance with embodiments of the present invention. Asshown, the process may begin at Block 201 when the Prediction Marketserver 32 (e.g., a processor executing thereon) causes an interface foraccessing the Prediction Market system 30 to be displayed on a user'selectronic device 10, 12, for example, via a website operated by thePrediction Market server 32.

In one embodiment, in order to display the interface to the user, thePrediction Market server 32 may transmit a message (e.g., an email, textmessage, etc.) to the user's electronic device 10, 12 informing the userof the possibility of participating in a prediction market and includinga link through which the interface can be accessed (e.g., a link to thewebsite operated by the Prediction Market server 32).

In one embodiment, only users who have been invited by another trader orby a merchant, in association with which a prediction market is beingconducted, may participate in a prediction market. In particular,according to one embodiment, existing traders may be incentivized toinvite additional traders by, for example, providing the existing traderwith virtual credits for each new user invited and/or each invited userwho actually participates in a prediction market. Alternatively, or inaddition, a merchant may provide a list of potential traders itrecommends or requests inviting to participate in a prediction market.In either embodiment, only potential users who have been identified byother traders or by a merchant may receive the message from thePrediction Market server 32.

According to one embodiment, the interface displayed to the user (viahis or her electronic device) may first enable the user to establish aprofile including, for example, a unique username and password to beused when accessing the prediction markets, as well as a physicalmailing address associated with the user. The new user may be requiredto provide a physical mailing address, for example, so that thePrediction Market system 30 can prevent multiple account registrants(i.e., multiple participants registering the same physical address).

In one embodiment the new user may also be asked to provide a unique“invitation code.” According to this embodiment, the invitation code mayenable the Prediction Market system 30 to track how each participantcame to participate in the prediction markets, as well as more easilyidentify colluders and participants who register multiple times. Inparticular, since colluders will likely have “closely related”invitation codes with just one or two degrees of separation, if thePrediction Market system 30 notices that closely related participantsare bidding up a particular share, that may be a sign of collusion.

If the user is a returning or existing trader, the interface may includea place where the user can input his or her previously establishedunique username and password. In either event (i.e., whether a newtrader or an existing trader), the process may continue, at Block 202,when the Prediction Market server 32 receives the trader's uniqueusername and password and enables access to the Prediction Market system30.

In one embodiment, once access is enabled, a brief description andtutorial of the Prediction Market system 30 may be provided to the newuser, such as the one shown in FIGS. 3C-3E. Otherwise, the user mayimmediately begin taking steps to participate in a prediction market.

To that end, the Prediction Market server 32 (e.g., a processorexecuting thereon) may, at Block 203, display a request for the user toselect a market in which he or she would like to participate as a traderand, in response, receive a selection of one or more markets from thetrader. In one embodiment, the markets may include, for example,apparel, electronics, cosmetics and personal care, food and beverage,house and home, office supplies, pet services and supplies, sportinggoods, toys and games, and/or the like. A user may select any one ormore of the markets in which he or she feels he or she is mostcomfortable predicting whether a consumer will prefer a given productconcept. An example of an interface through which the user may selectone or more markets is shown in FIGS. 3A and 3B.

Upon receipt of the user's selected market(s), the Prediction Marketserver 32 (e.g., a processor executing thereon) may, at Block 204,retrieve and cause to be displayed information associated with each of agroup of two or more product concepts falling within one of the selectedmarkets. In one embodiment, this may involve retrieving, for example,from the concept database 36 and/or via a request to the correspondingmerchant server 40, 42, a list of the product concepts to be tested in asingle prediction market, and a description and/or image of each productconcept in the group. As noted above, a “product concept” may includeany product, package, logo, advertisement and/or the like for which aprediction market may be conducted in order to predict consumerpreference. As an example, the Prediction Market server 32 may retrieveinformation associated with a number (e.g., five) of different sodas(e.g., lemon, lime, grape, cherry and orange) a company is thinkingabout launching. An example of the information that may be displayed isshown in FIG. 3F.

In addition to retrieving a description and/or image of the productconcepts in the group, the Prediction Market server 32 (e.g., processorexecuting thereon) may retrieve, or determine, a current stock priceassociated with each product concept in the group and further cause thisinformation to be displayed. In one embodiment, the sum of the prices ofall the concepts in the group may equal some constant (e.g., $100),wherein, as described in more detail below, the price of each individualshare may fluctuate up and down as traders make purchases.

In one embodiment, the group of product concepts to be presented to thetrader (i.e., the prediction market in which the trader is invited toparticipate) may be selected based on a number of different factorsincluding, for example, the make up of the traders already selected oridentified to participate in a prediction market including that group ofconcepts. For example, according to one embodiment, traders may beinvited to participate in a prediction market for a group of conceptsbased on demographic characteristics. To illustrate, it might bedesirable to have a population of subjects that mirrors current censusdata relating to such factors as gender, income, race and/or the like.It might also be desirable to target a specific demographic segment.

At some point thereafter, the prediction market associated with thegroup of product concepts may be opened, wherein each trader invited toparticipate in that prediction market is enabled to purchase shares inwhichever product concept(s) he or she thinks has the best chance ofsucceeding in the real marketplace or which other consumers will prefer.In one embodiment, the prediction market associated with a particulargroup of product concepts may not open until a certain number of tradershave been selected or identified as participating in that market.

Once the prediction market has been opened, the process may continuewhen the trader indicates a number of shares he or she would like topurchase in one or more of the product concepts by, for example, movinga slide bar displayed on the interface in association with the productconcept(s) in which he or she would like to purchase shares. An exampleof the interface through which the trader may purchase shares using aslide bar is shown in FIGS. 3G and 3H. The trader may purchase shares inonly one product concept, or in multiple product concepts. ThePrediction Market server 32 (e.g., a processor executing thereon) may,at Block 205, receive an indication of the shares being purchased.

In one embodiment, the Prediction Market server 32 (e.g., a processorexecuting thereon) may provide a recommendation of the number of sharesthe trader should purchase. In this embodiment, the Prediction Marketserver 32 may first receive an indication of how strongly the traderfeels that the selected product concept will be successful. Then, basedon that indication, the Prediction Market server 32 may indicate arecommended number of shares to purchase. For example, the PredictionMarket server 32 may recommend more shares the more confident orstrongly the trader feels that the selected product concept will besuccessful. In addition, in order to assist the trader in making his orher decision, an interface such as that shown in FIG. 3I, may beprovided, wherein the current market share associated with each productconcept is provided.

Assuming the trader has sufficient funds to purchase the sharesindicated (as determined, for example, by accessing the trader database34 and reviewing the trader's monetary balance), the Prediction Marketserver 32 (e.g., processor executing thereon) may, at Block 206, add anentry to the trader database 34 in association with the trader (e.g.,the trader's unique username) indicating the number of shares purchasedand the price(s) of those shares.

The Prediction Market server 32 and, in particular, a processorassociated with the Prediction Market server 32 executing, for example,the price adjustment module, may then, at Block 207, alter or adjust thestock price of each product concept in the group of product conceptsbased on the number of shares purchased by the trader and in whichproduct concept(s). The Prediction Market server 32 may further updatethe display accordingly (see FIG. 3H “New Price”)). In one embodiment,adjusting the stock prices may involve, for example, increasing thestock price of the product concept(s) in which shares were purchased bya first amount that is based on the number of shares purchased and,correspondingly, decreasing the stock price of the remaining productconcepts in the group of product concepts (i.e., those for which shareswere not purchased) by a second amount, wherein the first amountmultiplied by the number of product concepts in which shares werepurchased is equal to the second amount multiplied by the number ofremaining product concepts. In one embodiment the greater the number ofshares purchased in one concept, the higher the price of that stock,and, as a result, the lower the price of the stock in the remainingconcepts in the group.

To illustrate, assume for example, that there are five different productconcepts in the group of product concepts (e.g., five differentsodas—lemon, lime, grape, cherry and orange), and that the sum of thestock prices of each product concept in the group begins and remains at$100, such that the price of stock in each concept began at $20 (5concepts×$20/concept=$100). If a trader purchases, for example, 10shares in the grape soda, the price of the grape soda stock may increaseby, for example, $8 (i.e., the first amount) to $28/share. Because thesum of the stock prices associated with all of the concepts in the groupremains $100, the stock price in each of the remaining four sodas willdecrease by $2 (i.e., the second amount equal to the first amount ($8)divided by the number of remaining product concepts (4)) to $18/share.

In addition to receiving stock purchase information from the trader, thePrediction Market server 32 of one embodiment may, for example, displayand receive answers to one or more questions, wherein the answers may beused to enhance the feedback provided to a merchant regarding theprediction market in which the trader participated. (Block 208).Questions may include, for example, the trader's age, gender, race,occupation, salary, reasons for purchasing the shares purchased, and/orthe like. FIGS. 3J and 3K provide examples of an interface through whichthe questions may be displayed and answers received.

At some point thereafter, the Prediction Market server 32 may “close themarket,” or prohibit traders from purchasing or selling any more sharesin the product concepts in the group. (Block 209). In one embodiment,this may occur when a certain number of traders have made a trade withinthe group, after a certain time period has passed, after a certainnumber of overall shares have been purchased, and/or the like. In oneembodiment, a trader may be notified (e.g., via an email, text message,or similar message, sent to or displayed for the user) of when it isanticipated that the market will close, such that the trader may makechanges to his or her purchases up to the last moment.

Once the market is closed, the Prediction Market server 32 (e.g., aprocessor associated with the Prediction Market server 32 executing, forexample, a winning concept module) may, at Block 210 identify thewinning product concept from among the group of product concepts. In oneembodiment, a separate group of users (i.e., users who did notparticipate in the prediction market for this group of concepts) mayhave been asked to identify which of the concepts in the group he or shethought consumers would prefer. The results of this survey may determinethe winner of the prediction market. In this embodiment, a user mayparticipate in a prediction market for one group of concepts whileparticipating in a survey associated with another group of concepts. Inanother embodiment, the winning concept may be based on real life testmarket results. In this embodiment, some of the prediction markets(e.g., one half) may have a winning concept based on real life testmarket results, while others (e.g., the other one half) may be“un-resolvable,” or may not have a winner at all. A trader may not knowwhether he or she is participating in a resolvable or an un-resolvablemarket. If he or she participates in an un-resolvable market, he or shemay be given a refund of the amount spent purchasing stock, as well assome amount of virtual money to use in subsequent prediction markets. Ifthe user participates in a resolvable market, he or she may be “cashedout,” which is described below.

Once a winning concept has been identified, the Prediction Market server32 and, in particular, a processor associated with the Prediction Marketserver 32 and executing, for example, a cash out module, may “cash out”the traders participating in the closed prediction market. (Block 211).In one embodiment, this may involve first determining the amount to bepaid to (or added to the accounts of) each of the winning traders andthe amount to be paid by (or deducted from the accounts of) the losingtraders. This may be done, for example, by assuming that the value ofeach share in the winning product concept (i.e., each winning share) isnow $100, while the value of each share in the losing product concepts(i.e., each losing share) is now $0. For traders who purchased a winningshare, for each share purchased, the winning trader would be entitled to$100 minus the amount for which he or she purchased that share (sincethe share is now worth more than the trader paid for it). For traderswho purchased a losing share, the purchase price (i.e., the number ofshares purchased times the price per share at the time purchased) wouldbe deducted from their funds (since the share is now worth less than thetrader paid for it).

Cashing out may further include increasing or decreasing by thedetermined amount the funds associated with each trader stored in thetrader database 32. In one embodiment, an email, text message and/or thelike may be transmitted to each trader's electronic device notifying thetrader of his or her earnings or losses associated with the closedprediction market. In one embodiment, the Prediction Market system 30may further have a check generated and transmitted to each winningtrader. In one embodiment, a minimum and maximum payout at a time may beestablished in order to prevent sending very small, or very large,checks.

In addition to cashing out participating traders, the Prediction Marketserver 32 (e.g., a processor associated with the Prediction Marketserver 32 executing, for example, an analysis module) may analyze theresults of the prediction market and generate and transmit a reportsummarizing the analysis to the merchant associated with the productconcepts in the group. (Block 212). In one embodiment, this may involvedetermining the final stock price of each concept (e.g., prior toconverting to $100/$0 based on the winning concept), as well as thevolume weighted average price (VWAP) associated with each concept.

As used herein, the VWAP may refer to the average price at which a sharewas purchased during the prediction market in association with a givenproduct concept and can be considered by a merchant as the percentagelikelihood the product concept will be successful. According to oneembodiment, the VWAP can be calculated based on the price of the shareeach time it was purchased and the number of shares purchased. Thefollowing example illustrates how a VWAP may be calculated in accordancewith embodiments described herein. Assume, for example, that User Apurchased 10 shares of product concept X at $10/share; User B purchased20 shares of product concept X at $12/share; User C purchased 5 sharesof product concept X at $14/share, and User D purchased 5 shares ofproduct concept X at $15/share, wherein User D was the last to purchaseshares of the product concept before the prediction market was closed.In this example, the VWAP of product concept X is $12.13((10×$10)+(20×$12)+(5×$14)+(5×$15))/40=$12.13. According to embodimentsof the present invention, this information may be more informative thanmerely providing the stock price of the product concept at the close ofthe market—or $15/share—since it better indicates how the average tradervalued the shares of the product concept (i.e., how strongly each traderfelt that the product concept would be successful).

According to one embodiment, the report may further include a summary ofthe traders who participated including their answers to the variousquestions posed at Block 208.

In one embodiment, the report may be transmitted to the merchant (i.e.,to the merchant server 40, 42) in an email, or similar message.Alternatively, or in addition, the report may be accessible by themerchant via a website associated with the Prediction Market system 30.

In addition to the foregoing, according to embodiments of the presentinvention, the Prediction Market server may generate and transmitmessages (e.g., emails, text messages, etc.) to a user (i.e., the user'scomputing device) regarding, for example, new markets a user may beinterested in participating in based on the markets selected by the userand/or the prediction markets previously participated in by the user.

In one embodiment, a user may be playing for real money—i.e., a paymarket. Alternatively, he or she may be purchasing shares as a game,with no real money changing hands—i.e., a non-pay market. In a paymarket, in one embodiment, a non one-one exchange rate may be applied,wherein each U.S. dollar may be worth more than one virtual dollar. Forexample, each U.S. dollar may be worth $1000 in virtual money. In anon-pay market, a user may be given a virtual currency with no cash-invalue. A non-pay market does not provide any cash incentive to a traderfor participating. However, it allows the Prediction Market system 30 toevaluate how active each participating trader is in the process. A paymarket, on the other hand, provides a tangible reward to the subject forparticipating.

In one embodiment a user may first be required to show a certain levelof participation in a non-pay market before they are permitted toparticipate in a pay market.

In one embodiment, a user may be involuntarily dismissed from futureparticipation in prediction markets via the Prediction Market system 30,for example, because he or she has not made a certain number of trades(e.g., one) within a certain time period (e.g., each month), or becausehe or she violated a rule associated with participating in theprediction markets (e.g., colluding with other market participants).

In one embodiment, the amount of money a trader is allowed to use topurchase shares in one or more product concepts in a single group may becapped in order to prevent “rich” traders from having too much influencein a given market.

In another embodiment, the number of traders permitted to participate ina given prediction market may be capped in order to prevent too manytraders from crowding into an “easy” prediction market with an obviousright answer.

In yet another embodiment, in order to avoid and detect collusionamongst market participants in the form of one participant bidding onthe same computer with multiple logins, the Prediction Market system 30may further be configured to track the IP addresses of participants toassure the same one is not being used for multiple accounts.

CONCLUSION

As described above and as will be appreciated by one skilled in the art,embodiments of the present invention may be configured as a system,method or network entity. Accordingly, embodiments of the presentinvention may be comprised of various means including entirely ofhardware, entirely of software, or any combination of software andhardware. Furthermore, embodiments of the present invention may take theform of a computer program product on a computer-readable storage mediumhaving computer-readable program instructions (e.g., computer software)embodied in the storage medium. Any suitable computer-readable storagemedium may be utilized including hard disks, CD-ROMs, optical storagedevices, or magnetic storage devices.

Embodiments of the present invention have been described above withreference to block diagrams and flowchart illustrations of methods,apparatuses (i.e., systems) and computer program products. It will beunderstood that each block of the block diagrams and flowchartillustrations, and combinations of blocks in the block diagrams andflowchart illustrations, respectively, can be implemented by variousmeans including computer program instructions. These computer programinstructions may be loaded onto a general purpose computer, specialpurpose computer, or other programmable data processing apparatus, suchas processor 210 discussed above with reference to FIG. 1B, to produce amachine, such that the instructions which execute on the computer orother programmable data processing apparatus create a means forimplementing the functions specified in the flowchart block or blocks.

These computer program instructions may also be stored in acomputer-readable memory that can direct a computer or otherprogrammable data processing apparatus (e.g., processor 210 of FIG. 1B)to function in a particular manner, such that the instructions stored inthe computer-readable memory produce an article of manufacture includingcomputer-readable instructions for implementing the function specifiedin the flowchart block or blocks. The computer program instructions mayalso be loaded onto a computer or other programmable data processingapparatus to cause a series of operational steps to be performed on thecomputer or other programmable apparatus to produce acomputer-implemented process such that the instructions that execute onthe computer or other programmable apparatus provide steps forimplementing the functions specified in the flowchart block or blocks.

Accordingly, blocks of the block diagrams and flowchart illustrationssupport combinations of means for performing the specified functions,combinations of steps for performing the specified functions and programinstruction means for performing the specified functions. It will alsobe understood that each block of the block diagrams and flowchartillustrations, and combinations of blocks in the block diagrams andflowchart illustrations, can be implemented by special purposehardware-based computer systems that perform the specified functions orsteps, or combinations of special purpose hardware and computerinstructions.

Many modifications and other embodiments of the inventions set forthherein will come to mind to one skilled in the art to which theseembodiments of the invention pertain having the benefit of the teachingspresented in the foregoing descriptions and the associated drawings.Therefore, it is to be understood that the embodiments of the inventionare not to be limited to the specific embodiments disclosed and thatmodifications and other embodiments are intended to be included withinthe scope of the appended claims. Moreover, although the foregoingdescriptions and the associated drawings describe exemplary embodimentsin the context of certain exemplary combinations of elements and/orfunctions, it should be appreciated that different combinations ofelements and/or functions may be provided by alternative embodimentswithout departing from the scope of the appended claims. In this regard,for example, different combinations of elements and/or functions thanthose explicitly described above are also contemplated as may be setforth in some of the appended claims. Although specific terms areemployed herein, they are used in a generic and descriptive sense onlyand not for purposes of limitation.

1. A network entity comprising: a processor configured to: receive aselection of one or more markets in which a user would like toparticipate in a prediction market; retrieve information associated witha group of two or more product concepts falling within one of theselected markets, said information comprising a stock price associatedwith respective product concepts of the group of product concepts; causethe retrieved information to be displayed; receive an indication of anumber of shares to be purchased by the user in at least one of theproduct concepts; and adjust the stock price associated with eachproduct concept in the group of product concepts based at least in parton the number of shares purchased, wherein a sum of the stock pricesassociated with each of the product concepts in the group of productconcepts is constant, such that the stock price of one product conceptin the group of product concepts is dependent upon the stock price ofthe other one or more product concepts in the group of product concepts.2. The network entity of claim 1, wherein in order to adjust the stockprice associated with each product concept, the processor is furtherconfigured to: increase the stock price associated with the at least oneproduct concept in which shares were purchased by a first amount; anddecrease the stock price associated with each of the remaining productconcepts in the group of product concepts by a second amount.
 3. Thenetwork entity of claim 1, wherein the processor is further configuredto: identify a winning product concept in the group of product concepts;and determine an amount to be paid to or by the user based at least inpart on the number of shares purchased, the stock price of the sharespurchased at the time the shares were purchased, and the winning productconcept.
 4. The network entity of claim 3, wherein in order to identifya winning product concept, the processor is further configured toreceive a plurality of responses to a survey in which the productconcept in the group of product concepts thought most likely to besuccessful or preferred is identified.
 5. The network entity of claim 3,in order to identify a winning product concept, the processor is furtherconfigured to retrieve results of a real-life market test associatedwith the group of product concepts.
 6. The network entity of claim 3,wherein the sum of the stock prices associated with each of the productconcepts in the group of product concepts is $100.
 7. The network entityof claim 6, wherein in order to determine an amount to be paid to or bythe user, the processor is further configured to: adjust the stock priceassociated with the winning product concept to $100; adjust the stockprice associated with each of the remaining product concepts in thegroup of product concepts to $0; and determine a final value of theshares purchased by the user based at least in part on the adjustedstock price of each of the product concepts in the group of productconcepts.
 8. The network entity of claim 1, wherein the processor isfurther configured to: determine a volume weighted average priceassociated with each of the product concepts in the group of productconcepts based at least in part on the stock price associated with eachproduct concept each time a share of the product concept was purchased.9. The network entity of claim 1, wherein the processor is furtherconfigured to: transmit a message to the user inviting the user toparticipate in a prediction market, said message displaying a linkthrough which the user can access an interface associated with theprediction market.
 10. The network entity of claim 1, wherein the one ormore markets are selected from a group consisting of apparel,electronics, cosmetics and personal care, food and beverage, house andhome, office supplies, pet services and supplies, sporting goods, andtoys and games.
 11. The network entity of claim 1, wherein the retrievedinformation comprises a description and an image of respective productconcepts.
 12. A method comprising: receiving a selection of one or moremarkets in which a user would like to participate in a predictionmarket; retrieving information associated with a group of two or moreproduct concepts falling within one of the selected markets, saidinformation comprising a stock price associated with respective productconcepts of the group of product concepts; causing the retrievedinformation to be displayed; receiving an indication of a number ofshares to be purchased by the user in at least one of the productconcepts; and adjusting, by a processor, the stock price associated witheach product concept in the group of product concepts based at least inpart on the number of shares purchased, wherein a sum of the stockprices associated with each of the product concepts in the group ofproduct concepts is constant, such that the stock price of one productconcept in the group of product concepts is dependent upon the stockprice of the other one or more product concepts in the group of productconcepts.
 13. The method of claim 12, wherein adjusting the stock priceassociated with each product concept further comprises: increasing thestock price associated with the at least one product concept in whichshares were purchased by a first amount; and decreasing the stock priceassociated with each of the remaining product concepts in the group ofproduct concepts by a second amount.
 14. The method of claim 12 furthercomprising: identifying a winning product concept in the group ofproduct concepts; and determining an amount to be paid to or by the userbased at least in part on the number of shares purchased, the stockprice of the shares purchased at the time the shares were purchased, andthe winning product concept.
 15. The method of claim 14, wherein the sumof the stock prices associated with each of the product concepts in thegroup of product concepts is $100, and wherein determining an amount tobe paid to or by the user further comprises: adjusting the stock priceassociated with the winning product concept to $100; adjusting the stockprice associated with each of the remaining product concepts in thegroup of product concepts to $0; and determining a final value of theshares purchased by the user based at least in part on the adjustedstock price of each of the product concepts in the group of productconcepts.
 16. The method of claim 12 further comprising: determining, bythe processor, a volume weighted average price associated with each ofthe product concepts in the group of product concepts based at least inpart on the stock price associated with each product concept each time ashare of the product concept was purchased.
 17. A computer programproduct comprising at least one computer-readable storage medium havingcomputer-readable program code portions stored therein, wherein thecomputer-readable program code portions comprise: a first executableportion for receiving a selection of one or more markets in which a userwould like to participate in a prediction market; a second executableportion for retrieving information associated with a group of two ormore product concepts falling within one of the selected markets, saidinformation comprising a stock price associated with respective productconcepts of the group of product concepts; a third executable portionfor causing the retrieved information to be displayed; a fourthexecutable portion for receiving an indication of a number of shares tobe purchased by the user in at least one of the product concepts; and afifth executable portion for adjusting the stock price associated witheach product concept in the group of product concepts based at least inpart on the number of shares purchased, wherein a sum of the stockprices associated with each of the product concepts in the group ofproduct concepts is constant, such that the stock price of one productconcept in the group of product concepts is dependent upon the stockprice of the other one or more product concepts in the group of productconcepts.
 18. The computer program product of claim 17, wherein thecomputer-readable program code portions further comprise: a sixthexecutable portion for identifying a winning product concept in thegroup of product concepts; and a seventh executable portion fordetermining an amount to be paid to or by the user based at least inpart on the number of shares purchased, the stock price of the sharespurchased at the time the shares were purchased, and the winning productconcept.
 19. The computer program product of claim 19, wherein the sumof the stock prices associated with each of the product concepts in thegroup of product concepts is $100, and wherein the seventh executableportion is configured to: adjust the stock price associated with thewinning product concept to $100; adjust the stock price associated witheach of the remaining product concepts in the group of product conceptsto $0; and determine a final value of the shares purchased by the userbased at least in part on the adjusted stock price of each of theproduct concepts in the group of product concepts.
 20. The computerprogram product of claim 17, wherein the computer-readable program codeportions further comprise: a sixth executable portion for determining avolume weighted average price associated with each of the productconcepts in the group of product concepts based at least in part on thestock price associated with each product concept each time a share ofthe product concept was purchased.